Utility fixing Customer Assistance Program

Last week, after City Council adopted the Fiscal Year 2017-18 budget, longtime Austin environmental advocate and Austin Energy critic Paul Robbins had something to celebrate. Robbins had been asking Council to reform Austin Energy’s Customer Assistance Program since 2014 and the new budget includes direction to do just that.

Starting in 2014, Robbins collected data on customers receiving city assistance with their electric, water and drainage service bills. What he found caused him to start complaining.

Robbins discovered that several hundred customers on the program, called CAP, had pricey real estate holdings and were not necessarily the low-income people the program was intended to serve.

Under the new rules adopted by Council, customers will be removed from the program if their home is valued at $250,000 or more and the household income is greater than 200 percent of the federal poverty level guidelines. In addition, CAP customers who own two or more properties within Austin Energy’s service territory and whose income is greater than 200 percent of the federal poverty guidelines will be considered ineligible.

For example, for a family of four, $49,200 is 200 percent of the poverty guidelines.

Robbins, known as T. Paul to his friends, first notified Council and the public about the problem at the end of 2014 and continued to do research and press for a solution during 2015, 2016 and this year.

Longtime Electric Utility Commissioner Shudde Fath commented, “It’s about damn time. Nobody but T. Paul would’ve pursued this for three years. I don’t know why they were so opposed to doing the right thing. … He showed them chapter and verse with pictures of the big homes. … My hat’s off to T. Paul.”

This summer, Robbins released a study showing that 554 customers receiving assistance as of January 2017 had homes valued at more than $250,000 or owned two or more properties. That same report indicated that 56 of those customers owned or co-owned assets of more than $1 million. In addition, 79 of those customers in the assistance program had homes featuring pools, fountains or outdoor kitchens, according to the study.

In one address to Council in July, Robbins displayed slides of houses owned by CAP customers, including one 4,600-square-foot Old West Austin home valued at $1.8 million and another mansion on Mount Bonnell valued at $1.4 million.

Council Member Leslie Pool, who chairs the Austin Energy Utility Oversight Committee, told the Austin Monitor, “I just want to thank Paul for his tenacity and also Jackie Sargent and her staff.” Sargent is the general manager of Austin Energy.

According to Pool, the reason that it took a long time to start the process of removing people who may not actually need help from the program was because of “the difficulty of making assumptions on the price of a home and whether the person who lives there was in fact qualifying for the reduced cost fees. That was a hang-up the whole time. We wouldn’t want to inadvertently leave people out, so we were being more liberal on letting people in.”

Austin Energy spokesperson Jennifer Herber said there were 36,512 customers enrolled in the assistance program in August, about 8 percent of Austin Energy’s approximately 460,000 customers.

It is clear that Austin Energy has been working on the problem for a while but, according to Herber, until Council adopted the new rules Austin Energy could not remove people from the program involuntarily.

She said, “We have already been reaching out to folks who are out of scope … and giving them the option to unenroll themselves. Unless we hear from them we can’t take them off.”

The utility is now working with its vendor to put new rules in place so that those who are not truly needy may be removed involuntarily. Herber said staff expects to have that process in place by the end of this year.

Once the utility has that taken care of, Robbins has something else for Austin Energy to consider. As a conservation advocate, Robbins is perplexed about Austin Energy’s decision to give a 10 percent discount to everyone on the Customer Assistance Program. Robbins uses about 200 kilowatts a month and people who are clearly wasting energy, such as those using 5,000 kilowatts a month, are getting a break on their bills.

This is a waste of money and a waste of energy, he warns. Robbins is happy that Council approved the new policy on eligibility. “That’s great,” but it needs to do more, he said.

Council needs to direct Austin Energy to consider whether it should qualify customers for CAP simply on income. Perhaps that would save money on administrative costs, he said. In addition, Robbins wants Austin Energy to stop giving discounts to people who used large quantities of energy. If it did that, the utility would have more money to help the truly needy, he said.

In his report, Robbins wrote, “In 2015, $2.2 million, or 21% of total Austin Energy CAP discounts, went to the 4th and 5th tiers of use. If the money were redistributed to give higher discounts to customers in the first 3 tiers of use, it would be more equitable, while at the same time encouraging conservation. Distributing this money equitably among all CAP participants would raise the average discount of about $250 in 2015 by about $60 per year.”

Photo of one of the homes formerly included in the Customer Assistance Program courtesy of Paul Robbins.

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Key Players & Topics In This Article

Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.

Austin Energy: As a municipally-owned electric utility, Austin Energy is a rarity in the largely deregulated State of Texas. It's annual budget clocks in at over $1 billion. The utility's annual direct transfer of a Council-determined percentage of its revenues offers the city a notable revenue stream.

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